New Sears sells DieHard brand to Advance Auto Parts for $200M

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UPDATE: December 23, 2019: The new Sears has sold the DieHard battery brand to Advance Auto Parts for $200 million, the companies said in a press release.

Under the deal, Sears could continue to sell the DieHard brand in its existing channels through a supply agreement with Advance. Sears would also get an exclusive, royalty-free, perpetual license to develop and sell DieHard branded products in non-automotive categories. Peter Boutros, president of the Kenmore, Craftsman and DieHard unit, said those could include sporting goods, lawn and garden, and work wear, among other possibilities.

Advance Auto Parts CEO Tom Greco praised the DieHard brand reputation and said his company sees opportunity to extend it into other automotive categories.

Dive Brief:

The retailer has received inquiries from prospective buyers and is working with investment and financial services firm Guggenheim Partners to advise it, according to the Journal. A Sears spokesperson declined Retail Dive's request for comment.

After former CEO Eddie Lampert bought the remaining Sears and Kmart stores out of bankruptcy, the new company he formed is reportedly closing more than 100 stores by the end of the year.

Dive Insight:

The new Sears is starting to look a whole lot like the old Sears: closing stores, selling assets and borrowing money from owner-chairman Eddie Lampert at a dizzying clip. That comes as little surprise, given Lampert's full involvement in the reformulated Sears (named Transform Holdco).

With Lampert as CEO, the old Sears (Sears Holdings) sold off the prized Craftsman brand — at a time when retailers of all stripes were doubling down on private and exclusive brands, seeing them as margin boosters and sales-drivers. Sears has also looked for possible buyers of the DieHard and Kenmore brands in the past, but did so without making a sale.

The moves to close stores, borrow money and unload assets all point to continued sales declines at the remaining Sears stores, which are now operated privately under Transform and no longer report financials. And so Sears continues to shrink. Reuters reported earlier this month that the retailer will have about 300 stores left by the end of the year. A decade ago, Sears had about 12 times that many stores in the U.S.

As it contemplates selling its famous line of batteries, Sears is also making an acquisition of Sears Hometown (which Sears Holdings used to own, before spinning it off under Lampert). The new Sears has said the acquisition will accelerate its transition to smaller format stores, but Hometown has problems of its own. Namely, it is bleeding sales and money as it waits to be acquired.

Meanwhile, Sears and Kmart stores' former owner, Sears Holdings — which has sued and been sued by the new Sears, and these days mostly amounts to a towering pile of lawyers' bills — had its full liquidation and Chapter 11 plan approved in bankruptcy court this month.